The Wall Street Journal
By Inti Landauro
Sept. 25, 2014 3:08 a.m. ET
PARIS—Franco-Dutch
airline Air France-KLM confirmed it has shelved plans to expand its
Transavia low-cost airline across Europe in a bid to halt a crippling
pilots' strike at its French arm that has cost the company millions of
euros.
Pilots walked out on
Sept. 15 to oppose the project and demanded that all the group's pilots
be given the same working conditions and benefits as those at its French
arm. They feared the company would use Transavia to replace
France-based pilots with those in countries where salaries are lower.
After a 10-day strike
that has cost the company up to €20 million ($25.6 million) a day, Air
France-KLM said late Wednesday that instead of creating Transavia
offshoots in other European countries it will now only expand the
airline in France.
The company called on pilots to return to work immediately.
"This balanced proposal
answers the labor unions' concerns by bringing a renewed guarantee there
won't be any relocation," the statement said late Wednesday.
The strike has hammered
Air France's already precarious finances and threatened restructuring
plans aimed at turning around the loss-making airline. Despite repeated
calls by the airline's management and government officials to end the
strike, the main pilots' unions extended it beyond the originally
planned one-week protest.
During the first week,
Air France-KLM Chief Executive Alexandre de Juniac refused to shift his
position. Then on Monday he proposed freezing the Transavia expansion
plan for three months while pursuing talks with pilots. Presenting the
concession package as an "ultimate" step, Mr. de Juniac also proposed
fast-tracking the development of Transavia-France, increasing its fleet
to 37 planes from 14.
Mr. de Juniac said Monday
that the company needed to secure slots and order planes by the end of
the year to allow a quick start for Transavia Europe. The pilots
rejected the Monday offer and demanded that Transavia Europe be shelved.
The SNPL-Air France union
described the Monday offer as the "ultimate provocation." Its president
Jean-Louis Barber called on the government to intervene. The state owns
15.9% of the company.
Early Wednesday, French
transport minister Alain Vidalies, anticipated the ending of the
Transavia Europe project during a radio interview.
Union officials weren't immediately available to comment.
- Source: http://online.wsj.com
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